XAO Technical Analysis

[tech/a]

So would you?

 

[CanOz]

inverted XAO, fair point...

 

[tech/a]

inverted XAO, fair point...

XJO but yeh

 

[Gringotts Bank]

One thing that fascinates me about upside down charts is that most of them don't look "right". Without being able to quantify what it is, they look wrong somehow. There's a huge untapped market inefficiency lurking somewhere in a deep dark pool!

 

[CanOz]

One thing that fascinates me about upside down charts is that most of them don't look "right". Without being able to quantify what it is, they look wrong somehow. There's a huge untapped market inefficiency lurking somewhere in a deep dark pool!

Very true....

Well GB, one thing that's obvious is that the declines are slow, and the inclines are fast. The opposite of a normal market!

To me, that's what makes it look so strange.

CanOz

 

[Gringotts Bank]

Very true....

Well GB, one thing that's obvious is that the declines are slow, and the inclines are fast. The opposite of a normal market!

To me, that's what makes it look so strange.

CanOz

There should be a way to exploit that, but I can't think how. Any ideas?

 

[skc]

There should be a way to exploit that, but I can't think how. Any ideas?

The way to exploit what? The upside down chart looking strange?

If you are talking about exploiting the difference in slope between rises vs falls, you'd probably need a strategy around some volatility-based instrument (options).

 

[sinner]

Very true....

Well GB, one thing that's obvious is that the declines are slow, and the inclines are fast. The opposite of a normal market!

To me, that's what makes it look so strange.

CanOz

It's important to understand the link between volatility and compound returns...

t is important to note that risk premiums- or the relationship between required higher rates of return for higher risk- are arithmetic. That means that the curious underperformance of high risk stocks/assets versus low risk stocks/assets probably has less to do with a hidden risk factor or behavioral bias, but rather the fact that we are compounding our wealth

http://cssanalytics.wordpress.com/2...link-between-volatility-and-compound-returns/

 

[Struzball]

So would you?


View attachment 51243

I'd be averaging down

 

[kid hustlr]

The way to exploit what? The upside down chart looking strange?

If you are talking about exploiting the difference in slope between rises vs falls, you'd probably need a strategy around some volatility-based instrument (options).

I think this is the concept of option skew? Option prices reflect that stocks fall at a fast rate than they rise.

 

[tech/a]

I'd be averaging down

97% of domestic traders do.
3% ARE making money 97% are gambling that they MAY make money.

I think this is the concept of option skew? Option prices reflect that stocks fall at a fast rate than they rise.

What??

 

[Struzball]

97% of domestic traders do.
3% ARE making money 97% are gambling that they MAY make money.

Yes, the goal would be to "lose" money, inverted chart wise.
Basically that chart highlights why not to average down in an actual falling market, I was poking fun at averaging down.

I've been wondering about value investors, in a falling market the lower the price goes, the better the fundamentals look, and the more money is lost.
Would it be correct that the higher the market goes the worse the fundamentals? Because the fundamentals are clearly u/s at the moment, I'm curious how much worse they will get.

My conclusion, buy into crappy fundamentals for gain.

 

[CanOz]

I'd be averaging down

Imagine having to take the pain for twice as long! Even so cynical would throw in the towel!

CanOz

 

[Gringotts Bank]

I can see us back at 5030 soon. Yesterday and today both weak bars rejecting new highs.

 

[tech/a]

Yes, the goal would be to "lose" money, inverted chart wise.
Basically that chart highlights why not to average down in an actual falling market, I was poking fun at averaging down.

I've been wondering about value investors, in a falling market the lower the price goes, the better the fundamentals look, and the more money is lost.
Would it be correct that the higher the market goes the worse the fundamentals? Because the fundamentals are clearly u/s at the moment, I'm curious how much worse they will get.

My conclusion, buy into crappy fundamentals for gain.

This whole question was played out at length with ducati a few years ago.

https://www.aussiestockforums.com/forums/showthread.php?t=2829

If Duc had averaged down as his fair value stocks fell he would have blown up sooner.
I liken the exercise to So Cynical and Robustas threads.
Both still in the process.
Both a little better managed (Portfolio wise) Than Duc's.

I'm sure you'll find it interesting reading.

 

[Ves]

If Duc had averaged down as his fair value stocks fell he would have blown up sooner.

Guy buying "fundamentally sound" oil, mining and other small cap specialities blows up his account. Disapproves value investing & averaging down forever.

 

[skc]

I can see us back at 5030 soon. Yesterday and today both weak bars rejecting new highs.

Since January 05 the SPI has gained a sum total of only 241 points during the day trading session. While the market has gone up 2500 points!!! All of the gain has come in the overnight gaps. Most of the day moves are filling and fading around the general trend

http://tremblinghandtrader.typepad.com/trembling_hand_trader/2007/07/spi.html

 

[chops_a_must]

http://tremblinghandtrader.typepad.com/trembling_hand_trader/2007/07/spi.html

What has been unusual though is that in a lot of markets, they have been trending higher from open.

There is still a lot of strength in the buying, and most down days, or small gaps are still getting bought.

 

[tech/a]

Guy buying "fundamentally sound" oil, mining and other small cap specialities blows up his account. Disapproves value investing & averaging down forever.

Well you'd expect in a screaming Bull market he'd at least stay solvent.

There are many traders Technical and fundamental who cant turn a profit.
They are too hung up on the What (mechanics---value investing---breakout trading---mean reversion) than the Why (what you do---how ever you do it ) a method could have a chance to be/will be profitable.

 

[CanOz]

I guess we should try and stick to the topic, Technical Analysis of the XAO.

CanOz